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Over the years, consumers have been burned by websites offering “free” credit reports which had more than a few strings attached. After signing up for their free report, these misleading sites would then begin billing the unsuspecting users on a monthly basis after their trial periods ended. That’s why it’s been refreshing to use Credit Karma, a service which offers free credit monitoring and free credit scores that are actually free, not free*.

I’ve been a somewhat obsessed user of the Credit Karma iOS app in recent months, now that I have a near-term goal of applying for a new mortgage. I’ve been working to clean up the old, negative items on my credit report, and it’s a little thrill to log in to the app to see the score increase as these changes are made.

Credit Karma, through a partnership with TransUnion and VantageScore (a scoring system for all three credit agencies) has been providing users like myself with updated credit scores on a weekly basis for some time.

In addition, the service alerts users to changes on their credit reports, like balance decreases or increases, credit limit changes, hard credit inquires, new accounts, and other items. It also offers you a “credit report card” which grades you on each aspect of your credit history and behavior, including your open credit card utilization, percent of on-time payments, average age of open credit card lines, and more. More importantly, it explains how each item works and why it matters, which goes a long way toward demystifying consumer credit.

Based on your own credit history and profile, Credit Karma generates revenue by referring you to related services like credit cards, loan products, or debt consolidation industries. I actually ended up contracting with a service called Lexington Law thanks to the app, which is doing the busy work of writing the letters to the various credit agencies on my behalf, asking them to remove the negative items that should have dropped off ages ago. (Yes, I know I could do this myself, but I don’t have time.)

Credit Karma notes that 25% of consumers have errors on their report that might affect their score, and 33% of people have never checked their report. Meanwhile, the average consumer’s credit score is 633 but the threshold for having what’s considered “good” credit is 720.

Unfortunately, one thing Credit Karma didn’t have until now was access to consumer’s full credit reports, instead presenting you with more of a summary of where you stand financially. So you would still have to go through the normal procedures to request your once-per-year free report, or pay a company to pull it for you. With today’s rollout, that changes, as consumers’ credit reports are being made available within Credit Karma for free at any time. They can also be refreshed on as often as a weekly basis, if you choose.

As per usual, Credit Karma doesn’t just present the information, but explains what it means and recommends actions you should take.

The deal for these new reports is with TransUnion again, so technically, it’s one of three credit reports available to consumers. When TransUnion retrieves your credit report they do so by requesting your credit information on your behalf, which is known as a “soft inquiry.” These types of inquires aren’t shown to creditors so they don’t affect your credit the way that “hard inquiries” can.

The move should help Credit Karma better compete with traditional credit monitoring agencies as well as with more direct competitors like score provider and financial advisor ReadyForZero as well as with Credit Sesame, which also offers free credit scores and summaries, but today charges $9 for access to credit reports.

Below, a dummy report so you can see what it looks like:

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CrunchBase

OverviewCredit Karma offers a new way to track your credit score and a unique way to benefit from it. For the first time you can get a truly free credit score with no hidden costs or obligations. Based on your score, you gain access to exclusive offers from companies that value your creditworthiness.
The premise of consumer Credit Scoring is that people with good credit pay their bills on time, are less …